Goal independent central banks: Why politicians decide to delegate
AbstractA motivation for central bank independence (CBI) is that policy delegation helps politicians manage diverse coalitions. This paper develops a model of coalition formation that predicts when delegation will occur. An analysis of policy preferences survey data and CBI indicators supports the predictions. The model also explains why the expected negative relationship between CBI and inflation is not empirically robust: endogenous selection biases the estimated effect towards zero. The data confirm this.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 24 (2008)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505544
C31 C72 D72 E31 E58 Central bank independence Inflation Coalition formation Treatment effects;
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- Cen - Mathematical and Quantitative Methods - - - - -
- ban - - - - - -
- ind - - - - - -
- Inf - Health, Education, and Welfare - - - - -
- Coa - Mathematical and Quantitative Methods - - - - -
- for - - - - - -
- Tre - - - - - -
- eff - - - - - -
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Demange, Gabrielle, 1994.
"Intermediate preferences and stable coalition structures,"
Journal of Mathematical Economics,
Elsevier, vol. 23(1), pages 45-58, January.
- Demange, G., 1991. "Intermediate Preferences and Stable Coalition Structures," DELTA Working Papers 91-16, DELTA (Ecole normale supérieure).
- Guy Debelle & Stanley Fischer, 1994.
"How independent should a central bank be?,"
Working Papers in Applied Economic Theory
94-05, Federal Reserve Bank of San Francisco.
- Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-67, March.
- Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
- Martin J. Osborne & Ariel Rubinstein, 1994.
"A Course in Game Theory,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262650401, December.
- Christopher W. Crowe, 2006. "Goal-Independent Central Banks," IMF Working Papers 06/256, International Monetary Fund.
- Ray, D. & Vohra, R., 1996.
"A Theory of Endogenous Coalition Structure,"
68, Boston University - Industry Studies Programme.
- Moser, Peter, 1999. "Checks and balances, and the supply of central bank independence," European Economic Review, Elsevier, vol. 43(8), pages 1569-1593, August.
- Bernhard, William & Leblang, David, 2002. "Political Parties and Monetary Commitments," International Organization, Cambridge University Press, vol. 56(04), pages 803-830, September.
- Levy, Gilat, 2004. "A model of political parties," Journal of Economic Theory, Elsevier, vol. 115(2), pages 250-277, April.
- Hayo, Bernd, 1998. "Inflation culture, central bank independence and price stability," European Journal of Political Economy, Elsevier, vol. 14(2), pages 241-263, May.
- Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
- Gauti B. Eggertsson & Eric Le Borgne, 2003.
"A Political Agency Theory of Central Bank Independence,"
IMF Working Papers
03/144, International Monetary Fund.
- Gauti B. Eggertsson & Eric Le Borgne, 2010. "A Political Agency Theory of Central Bank Independence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(4), pages 647-677, 06.
- Daunfeldt, Sven-Olov & Hellström, Jörgen & Landström, Mats, 2008.
"Why Do Politicians Implement Central Bank Independence Reforms?,"
HUI Working Papers
13, HUI Research.
- Sven-Olov Daunfeldt & Jörgen Hellström & Mats Landström, 2013. "Why Do Politicians Implement Central Bank Independence Reforms?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 41(4), pages 427-438, December.
- Daunfeldt, Sven-Olov & Hellström, Jörgen & Landström, Mats, 2008. "Why Do Politicians Implement Central Bank Independence Reforms?," UmeÃ¥ Economic Studies 733, Umeå University, Department of Economics.
- Daunfeldt, Sven-Olov & Hellström, Jörgen & Landström, Mats, 2009. "Why Do Politicians Implement Central Bank Independence Reforms?," Ratio Working Papers 143, The Ratio Institute.
- Belke, Ansgar & Potrafke, Niklas, 2012.
"Does government ideology matter in monetary policy? A panel data analysis for OECD countries,"
Journal of International Money and Finance,
Elsevier, vol. 31(5), pages 1126-1139.
- Ansgar Belke & Niklas Potrafke, 2011. "Does Government Ideology Matter in Monetary Policy?: A Panel Data Analysis for OECD Countries," Discussion Papers of DIW Berlin 1180, DIW Berlin, German Institute for Economic Research.
- Ansgar Belke & Niklas Potrafke, 2009. "Does Government Ideology Matter in Monetary Policy? – A Panel Data Analysis for OECD Countries," Ruhr Economic Papers 0094, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Ansgar Belke & Niklas Potrafke, 2011. "Does Government Ideology Matter in Monetary Policy? A Panel Data Analysis for OECD Countries," Working Paper Series of the Department of Economics, University of Konstanz 2011-48, Department of Economics, University of Konstanz.
- Belke, Ansgar & Potrafke, Niklas, 2012. "Does government ideology matter in monetary policy? A panel data analysis for OECD countries," Munich Reprints in Economics 20245, University of Munich, Department of Economics.
- Berdiev, Aziz N. & Kim, Yoonbai & Chang, Chun Ping, 2012. "The political economy of exchange rate regimes in developed and developing countries," European Journal of Political Economy, Elsevier, vol. 28(1), pages 38-53.
- Niklas Potrafke, 2012. "Zum Einfluss von Regierungsideologie und Zentralbankunabhängigkeit auf die Geldpolitik," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 65(11), pages 25-26, 06.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.